CALIFORNIA / News and Insight on Business in the Golden State

Guess to Rehire Laid-Off Workers, Pay Back Wages

Apparel: The settlement clears away a batch of labor charges, but it does not end a union dispute.

Guess Inc. has agreed to reinstate 13 laid-off workers and to pay $113,000 in back wages to 20 other employees to settle charges that it tried to thwart a labor-organizing campaign by illegally dismissing union supporters.

The settlement, disclosed Tuesday, also requires Guess to disband two employee committees that labor organizers complained the clothing-manufacturing company had used to spur workers to stage anti-union rallies.

Although it clears away a batch of unfair labor charges filed by the apparel industry union UNITE against Guess that were being reviewed by the National Labor Relations Board, the settlement does not end the labor dispute.

Also pending are other unfair-labor practices charges filed by UNITE with the NLRB and several civil lawsuits between the company and the union.

The union is continuing a campaign launched in mid-1996 to recruit roughly 500 immigrant workers at Guess' plants and warehouses in Los Angeles.

Steve Nutter, the Western regional director of UNITE, said, "This settlement upholds the workers' right to organize, which has become an empty promise in recent years. We're hopeful the ability of the union and Guess to reach an agreement here may lead to other agreements in the future."

But Glenn Weinman, general counsel for Guess, said, "The company still feels the charges are without merit, and that it would have eventually prevailed" in an NLRB trial. Weinman said Guess, the biggest clothing company based in Southern California, agreed to the settlement "so it could focus on the business of manufacturing and retailing apparel." The company admitted no wrongdoing in the settlement.

The agreement appears to have been prompted, at least partly, by the NLRB's dismissal earlier this month of another UNITE charge against the company. In that case, the union charged that Guess' decision last year to shift much of its production from Southern California to Mexico and elsewhere in Latin America was intended to combat local union organizing. The NLRB found, instead, that Guess had decided on the production transfer before the union drive emerged. UNITE is appealing the decision.

Under the settlement reached among Guess, UNITE and the NLRB, the company is calling back 13 union supporters laid off in October. The company said they were laid off for economic reasons, but the NLRB issued a preliminary finding accepting UNITE's argument that the workers lost their jobs because of their union activities.

Most of the 20 workers receiving back pay were laid off in August 1996, shortly after the union campaign was announced. Most regained their jobs under a previous, informal settlement, but they never received compensation for the pay they lost while they were out of work for four months.

As part of the settlement, Guess also agreed to allow an NLRB agent to read a statement to employees stating that the company promises not to violate workers' rights to organize by firing, interrogating or otherwise discriminating against union supporters.

Shares of Guess rose 13 cents to close at $6.31 on the New York Stock Exchange.